Fragile earth

Quotes

The non-violent state will be an ordered anarchy. That State is the best governed which is governed the least.

Mohandas Ghandi

In no longer pretty citiesThere are warrants, forms and chittiesThere are fingers in the kittiesAnd a jackboot on the stair.

V for Vendetta

Sometimes it is said that man can not be trusted with the government of himself. Can he, then, be trusted with the government of others? Or have we found angels in the forms of kings to govern him? Let history answer this question.

Thomas Jefferson

They who can give up essential liberty to obtain a little temporary safety, deserve neither liberty nor safety.

Benjamin Franklin

If all mankind minus one were of one opinion, mankind would be no more justified in silencing that one person than he, if he had the power, would be justified in silencing mankind.

John Stuart Mills

Necessity is the plea for every infringement of human freedom. It is the argument of tyrants; it is the creed of slaves.

Never give your government any power that you wouldn't also be comfortable entrusting to a genocidal dictator.

The Angry Exile

Of all tyrannies, a tyranny exercised for the good of its victims may be the most oppressive. It may be better to live under robber barons than under omnipotent moral busybodies. The robber baron's cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end, for they do so with the approval of their own conscience.

C.S. Lewis

America is at that awkward stage. It's too late to work within the system, but too early to shoot the bastards.

Claire Wolfe

The powers delegated to the government must be precisely defined … and clearly be of such extent as that, by no reasonable construction, they can be made to invade the rights and prerogatives intended to be left in the people.

Richard Henry Lee

It will be of little avail to the people, that the laws are made by men of their own choice, if the laws be so voluminous that they cannot be read, or so incoherent that they cannot be understood; if they be repealed or revised before they are promulgated, or undergo such incessant changes that no man, who knows what the law is to-day, can guess what it will be to-morrow. Law is defined to be a rule of action; but how can that be a rule, which is little known, and less fixed?

James Madison

A charity that relies in the main part on taxes is no more a charity than a prostitute is your girlfriend.

Democracy never lasts long. It soon wastes, exhausts and murders itself. There was never a democracy that did not commit suicide.

John Adams

Government’s view of the economy can be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidise it.

Ronald Reagan

It's amazing to me how many people think that voting to have the government give poor people money is compassion. Helping poor and suffering people is compassion. Voting for our government to use guns to give money to help poor and suffering people is immoral self-righteous bullying laziness ... There is great joy in helping people, but no joy in doing it at gunpoint.

“And how we burned in the camps later, thinking: What would things have been like if every Security operative, when he went out at night to make an arrest, had been uncertain whether he would return alive and had to say good-bye to his family? Or if, during periods of mass arrests, as for example in Leningrad, when they arrested a quarter of the entire city, people had not simply sat there in their lairs, paling with terror at every bang of the downstairs door and at every step on the staircase, but had understood they had nothing left to lose and had boldly set up in the downstairs hall an ambush of half a dozen people with axes, hammers, pokers, or whatever else was at hand? [...] We didn't love freedom enough. And even more – we had no awareness of the real situation.... We purely and simply deserved everything that happened afterward.”

Angry Places

Saturday, 10 April 2010

According to the late Ronald Reagan, speaking as US President in 1988, these nine words form one of the most worrying sentences one person can say to another. If you want evidence for Reagan's astuteness there then you need look no further than Australia in 2010 and the Federal Government's Home Insulation Programme. The government men indeed came to help with 'handouts', and when they were finished 'helping' cowboy fitters had pockets full of taxpayer's cash, hundreds of thousands of Australian homes ended up with substandard, badly fitted or simply unneeded loft insulation, more than a hundred houses were damaged by fire, thousands of jobs were put at risk* and four deaths had been linked to the programme.

Now in one sense, that of being an expat Brit who moved from a house with double glazing and several inches of insulation in the roof and wall cavities to one which is probably not much more thermally efficient than a tent, I can see where the Federal Government was coming from. Despite the winter minimum temperatures being typically a few degrees warmer than where I lived in the UK - probably more with the last couple of British winters covering the country in globally warmed snow - many here have a choice of either walking around inside their homes dressed almost for the outside or having an enormous gas bill sometime around September. Conversely in summertime fans, coolers and air conditioners mean higher electricity bills, and for much the same reason - houses seem not to be very well insulated compared to what us poms are used to.** This could so easily be 'Things I Still Don't Get About Australia - No 23' (in fact it will be) because when it comes to keeping beer and sausages cool until they're wanted Australians understand perfectly well that good insulation serves to keep areas of warmth and cold separate, because when it comes down to it all an Esky really is is a well insulated box and almost every Aussie home seems to have one. It's the extension of that to living in a much larger well insulated box that seems to be pretty rare.

But while I understand where the Federal Government is coming from that doesn't make government intervention the answer, particularly when the decision is also influenced by its beliefs that warble gloaming demands energy efficiency (as if simply saving money isn't a good enough reason) and that the global financial crisis means government needs to spend money (taxpayers' money, natch) where it wants instead of allowing individuals to spend money where they want. This goes double when the government intervention takes the form of simply offering 'up to' $1,600 towards getting insulation fitted which would be paid directly to the company fitting it (link to PDF).

Under the Home Insulation Program the assistance is paid directly to the insulation installer, on behalf of the Householder, and $1,600 is expected to cover the cost of insulating an average home, so for most people there should be no more to pay.

The first thing that should have been expected from this is that many smaller jobs would now come in at around $1,600 regardless of size. The second is that having created an artificial boom in the supply and fitting of insulation it's natural that new companies would jump in to try and grab a share of all the taxpayer's money being hosed around. This is fine if the demand created by a subsidy becomes self sustaining, and I'm sure the wonks in Canberra hoped that this would happen, but if that doesn't occur by the time a subsidy scheme ends then suddenly, almost overnight really, the market is oversupplied. I'm no economist but this does not seem like A Good Thing from where I'm sitting. People like Tom Black, who started up an insulation installation company some months before the scheme began and who now faces bankruptcy, might well agree.

... Tom Black is due to be evicted from his home next week after the sudden closure of Kevin Rudd's $2.5 billion insulation scheme left his installation business without a single customer.

...

But Mr Black said that since the government suspended the scheme last month, business had dried up as customers waited for a new $1000 rebate program to start on June 1.

...

Mr Black said his business had failed through no fault of his own. He said while backpackers and others had come into the area and used sub-standard batts, or in some cases not installed insulation at all, he had done everything properly.

Mr Black said he was still owed $1600 by the government for an installation job last November. He said Assistant Climate Change Minister Greg Combet's office had told him they would try to ensure he was paid next week.

"By the end of the week it will be too late," he said.

Following on from the issue of new entries to the market, and mentioned in that article, is the third and most serious problem: that whenever the government gets out its chequebook almost inevitably cowboys and fraudsters are attracted in the hope that the government is too busy giving away taxpayers' money to look too carefully at the work it was supposed to pay for. Sure enough the Home Insulation Programme, despite supposed safeguards such as a government approved list of companies, saw everything. There was the merely deceitful, such as falsely telling people that insulation batts need to be replaced periodically. There was the fraudulent, such as submitting claims to the government for non-existent work. And there was the downright dangerous: fires blamed on ceiling downlights igniting the insulation and even whole roofs becoming electrified because of badly installed foil insulation.***

All this would have been avoided had the simpler option of taking less money from taxpayers been chosen instead. If householders have surplus money and high bills for heating their homes in winter and cooling them in summer then some will decide for themselves to get improved insulation, and some of their friends will do the same when the chat comes round to bills and how much insulation has reduced them by. Eventually insulation becomes the norm because word has got round that it makes financial sense for most homeowners. Unfortunately this becomes harder and harder when the government takes more and more money in tax in order to pay for subsidising its pet projects, and this is what happens in practice because governments like to take on these things and deal with them the way they deal with everything they think is a problem: bury it with money and hope it goes away.

Some might argue that lower tax will only benefit owner-occupiers and not renters since landlords might not bother spending their extra disposable income on insulation, but that assumes that well insulated properties would not then become more desirable (and perhaps attract slightly higher rents) than poorly insulated rentals. But even if you assume, as governments apparently tend to do, the mathematical impossibility that the whole population is of below average intelligence and therefore nobody can be trusted to decide for themselves how and on what they should spend any spare money they have, and that no landlords will choose to insulate their rental properties, is paying the subsidy to the fitter the best option? Looking at things from a wider point of view, by paying the fitters the government has put $2.5 billion of its stimulus into one small sector. Had the government taken the simpler option of taking $2.5 billion less tax that money would have been spread more or less evenly throughout the whole economy. Sure, money circulates and naturally plenty will go from the insulation fitters' pockets out into the wider economy, but that ignores the fact that there is always an administration cost with any subsidy. Simply taking less tax should require no extra administration and, with a little thought, might even mean administrative savings. Instead, having thrown $2.5 billion in a well intentioned but, as it turned out, ill considered and poorly controlled attempt to insulate more houses, the Federal Government has had to offer to pay for safety checks or remedial work on the 50,000+ houses where foil insulation was installed and a full audit of the standard of work carried out at 150,000 other properties. As much as $1,000 per house is being budgeted for the 50,000 or so homes where foil was used, which means more than $50 million for that alone (though some estimates are far higher). If the government is eventually forced to check all homes the cost will be substantial, since more than a million houses were insulated as part of the scheme.

This leads me to finish in the way I began, by quoting Ronald Reagan.

Government is like a baby. An alimentary canal with a big appetite at one end and no responsibility at the other.

Which also implies that there's often an unpleasant mess involved that then needs to be cleared up. With an election in the UK in under four weeks time Britons want to consider this when the usual suspects stand up and say their government will be there to help.

* Of course it can be argued that some of those jobs may have existed only because of the scheme rather than because the market for home insulation demanded them. However, unsustainable jobs being created and then lost aren't really anything for a government to be proud of.
** I have to admit that this is something of an assumption on my part. Based on the house I live in, the loft of a much newer property that we looked at and the fact the Federal Government thought there was a need to subsidise loft insulation on such a large scale in the first place, I'm guessing that poor insulation is fairly common. So yes, an assumption, but I think it's a fair one.
*** Metal roofs are fairly common in Australia and are sometimes still used even on brand new houses despite costing more than concrete tiles.